CAUTIONARY STATEMENTS

The information contained in this quarterly report on Form 10-Q is not a complete description of our business or the risks associated with an investment in our Company. We urge you to carefully review and consider the various disclosures made by us in this report and in our other filings with the Securities and Exchange Commission ("SEC"), including our registration statement on Form S-11 declared effective on July 29, 2004, that discuss our business in greater detail.

This report contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of our investments and financing needs. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "overestimate," "underestimate," "believe," "could," "project," "predict," "continue" or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results in future periods to differ materially from forecasted results. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to, changes in economic conditions generally and the real estate and bond markets specifically; our ability to originate a portfolio of high quality prime adjustable-rate mortgage ("ARM") and Hybrid ARM loans; changes in interest rates and/or credit spreads, as well as the success of our hedging strategy in relation to such changes; the quality and size of the investment pipeline and the rate at which we can invest our cash; changes in the markets; legislative/regulatory changes; completion of pending investments; the availability and cost of capital for future investments; competition within the finance and real estate industries; and other risks detailed from time to time in our SEC reports. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our management's views as of the date of this report. The factors noted above could cause our actual results to differ significantly from those contained in any forward-looking statement. For a discussion of our critical accounting policies see "Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates."

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this report to conform these statements to actual results.

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PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

MortgageIT Holdings, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

				September 30, 2004				December 31, 2003
				(unaudited)
ASSETS
Cash and cash equivalents				$	79,597			$	22,261
Restricted cash					920				1,517
Marketable securities held to maturity					1,420				1,419
Portfolio ARM loans
Arm loans collateralizing debt obligations, net					818,829				—
Arm loans held for securitization, net					321,086				—
Total Portfolio ARM loans					1,139,915				—
Mortgage loans held for sale					422,213				322,012
Hedging instruments					11,913				—
Accounts receivable, net of allowance					24,542				10,301
Prepaids and other current assets					6,800				5,481
Goodwill					11,639				11,665
Property and equipment, net					5,087				5,324
Total assets				$	1,704,046			$	379,980
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Liabilities:
Collateralized debt obligations, net				$	749,900			$	—
Warehouse lines payable					696,778				300,699
Hedging instruments					159				—
Notes payable and other debt					15,000				1,125
Accounts payable, accrued expenses and other liabilities					42,966				30,996
Total liabilities					1,504,803				332,820
COMMITMENTS AND CONTINGENCIES
Convertible redeemable preferred stock: 22,000,000 shares authorized; 15,082,973 issued and outstanding					—				62,557
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, $.01 par value: 125,000,000 shares authorized; 19,405,473 issued and outstanding					194				—
Common stock Class A, $0.01 par value: 1,895,000 shares authorized; 517,835 issued and outstanding (1)					—				5
Additional paid-in capital (1)					233,909				3,955
Unearned compensation – restricted stock					(2,455	)			—
Accumulated other comprehensive income (loss)					(9,856	)			—
Accumulated deficit					(22,549	)			(19,357	)
Total stockholders' equity (deficit)					199,243				(15,397	)
Total liabilities and stockholders' equity				$	1,704,046			$	379,980

(1)	Reflects, on a retroactive basis, for all periods presented, the exchange of approximately 12.80 shares of MortgageIT, Inc. common stock for each share of MortgageIT Holdings, Inc. common stock and the retention and retirement of common shares pursuant to the reorganization of MortgageIT, Inc.

The accompanying notes are an integral part of the consolidated financial statements

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MortgageIT Holdings, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars and shares in thousands, except per share data)

				Three months ended September 30,								Nine months ended September 30,
				2004				2003				2004				2003
Revenues:
Gain on sale of mortgage loans				$	14,269			$	23,552			$	51,941			$	65,810
Brokerage revenues					8,955				18,013				29,543				48,818
Interest income					15,804				6,793				27,397				18,865
Interest expense					(6,925	)			(3,484	)